Volkswagen boss Martin Winterkorn could be replaced by Porsche chief Matthias Muller by Friday as emissions-cheating scandal escalates
Volkswagen boss Martin Winterkorn is under growing pressure in the job as the car giant suffered a second day of billion-dollar losses to its share price following the emissions cheating scandal.
Berlin newspaper Der Taggespiegel is reporting that VW's supervisory board will meet tomorrow, ahead of a conference scheduled for Friday when it is expected to approve Porsche chief executive and Volkswagen board member Matthias Muller as his replacement.
A Volkswagen spokeswoman said she could not comment on these claims.
Earlier today the manufacturer said it had put aside €6.5bn (£4.2bn) to deal with scandal, which first emerged on Friday afternoon when the US' Environment Protection Agency claimed it had installed a “detect device” in some of its vehicles, which enabled them to cheat emissions tests.
The EPA estimated that around 480,000 cars on US roads would have to be recalled as a result of the scandal, but VW admitted as many as 11m cars could be affected worldwide.
Today Volkswagen's share price continued its tumble, falling 19 per cent at pixel time, exacerbating the falls sustained yesterday. Since its peak in March, more than $19bn has been wiped off Volkswagen's valuation.
David Papier, head of sales trading at ETX Capital, told City A.M. that "someone needs to fall on the sword", but said there could be further resignations as the scandal spreads.
"Ultimately responsibility lies with the chief executive as he is the one who has been signing it off… [But] if there is a class action lawsuit and it is proved that senior management have lied about it then there will need to be further action against management.
"I keep hearing that this is going to be the equivalent to the Libor scandal for the auto industry. I think the jury is still out on that, but certainly it could have major reputational damage. These car companies fall over themselves to say how clean they are, but the fact is they have been caught lying red-handed, and a number of people may have to pay the price."
UBS analyst Philippe Houchois said: "We see high probability that chief executive Winterkorn will resign if the group is found to have acted improperly. This would reverse newfound stability but support a more aggressive approach to the turnaround."
And he warned there could be a wider knock-on effect for the diesel industry, saying there would be "renewed focus on the current European regulation on emissions where targets remain disconnected from real-life emissions and NOx compliance is proving challenging".
"We also believe these event will accelerate the demise of diesel in Europe, at least in C segment and below," he added.